Five Essentials for Marketing Performance Measurement Systems

Successful marketers routinely capture key performance indicators, or metrics, to assess marketing performance within the allocated budget. This is known as a marketing performance measurement (MPM) system. However, even in companies with a strong measurement culture, metric reporting often remains sporadic and short term and lacks a clear strategic focus. Two recent studies highlight this issue. According to the September 2022 CMO Survey, senior marketers often monitor metrics like sales volume but are less likely to track complex metrics associated with brand and customer equity. And according to the annual survey for Clevertouch’s “State of Martech 2024” report, just 40% of companies actively track metrics linking marketing to revenue generation — and often do so in an ad hoc manner.

Such practices carry two significant risks. First, marketing’s ability to execute depends on budgetary access. Few members of the C-suite will feel confident approving full budgetary requests without seeing evidence from a comprehensive effectiveness analysis. Second, marketers are doing themselves a disservice: A range of activities, from branding to advertising, generate returns that take time to materialize. These returns might not be noticeable within the typical three-month time frame covered by ad hoc measurements.

Identifying and prioritizing important metrics to visualize in a dynamic dashboard is therefore a necessary undertaking for marketing leaders. It’s critical that leaders decide which metrics are optimal for their organization, yet even data-literate companies struggle with this issue. While every MPM system will be different, some essential guidelines can help demystify this important task.

Drawing upon our experience with consulting clients and other examples of good practice, we propose a checklist of five essential actions typically associated with better-assembled MPM systems. If you recognize any of these to be contrary to or missing from your current dashboard, it may be time to revisit your marketing metrics and MPM system.

1. Align metrics with strategy.

This should always be the first step, but in practice, it’s often disconnected from metric selection. Failure to marry strategy and measurement can be catastrophic. Consider the adage “You are what you measure.” When senior leaders endorse a particular metric, it conveys that related activities are mission-critical. This influences the tasks that staff members prioritize. Conversely, activities that aren’t strategically relevant become out of scope, wasteful, and sometimes counterproductive.